Volvo India may assemble the upcoming XC40 and S40 compact cars

Volvo Cars India has been mulling about the prospect of local assembly for quite some time. In fact, at every press conference, Volvo officials have always been asked this question. The answer was "we don't see the volumes at the moment for a plant". However, over the years, rumours of Volvo setting up shop in India have become stronger, with the brand's cars being positioned at a cut-throat pricing to that of locally assembled German cars.

A source now tells OVERDRIVE that this week, Volvo India is expected to make an announcement about a CKD assembly plant. The assembly plant is expected to be set up in Bangalore, and Volvo is said to have already approached several OEMs in Coimbatore to facilitate operations. It is said that the company initially wanted to partner with a local manufacturer. However, the plans weren't working out and hence Volvo has decided to go solo. It isn't clear yet about the investments Gothenburg has made into this Indian facility.

The Volvo 40.1 Concept previews the upcoming XC40 crossover

Volvo India's first assembly plant will start with manufacturing the XC90. At a later stage, Volvo Cars India is expected to bring in CKD versions of all its existing model line-ups, except for the complex hybrid iterations. The upcoming 40 Series too will be locally assembled. This makes sense given that Volvo is all set to usher in their new 40 range with the XC40, S40 and V40. These cars will be showcased at motorshows later this year with an Indian launch in 2019. Volvo might initially bring in these cars as CBUs and then, once the assembly plant is ready, roll out the CKD versions. This is expected to happen in 2019, given the general timelines as well as the complexity of setting up assembly lines.

It will be interesting to note how Volvo India prices its products after the localisation, given their prices are already lower than their German as well as British competitors.

Edit: Volvo has sent in a press release announcing the start of the assembly plant in India